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New zoning for creative industries

Melbourne needs high quality mixed use employment precincts now more than ever.

The Australian economy and the way that people perform work within it are changing radically. Traditional ideas about how we live and work are being disrupted by the combined impacts of technology, globalisation and demographic change. This has big implications for the future growth of our cities.

So what can our city-plans do to respond to these changes?

For many decades now, land use zoning in Australia has been used to separate activities, often based on the notion that residential, commercial and manufacturing activities are inherently incompatible.

In the new economy, this no longer holds true. In fact, it’s the opposite – new economy jobs thrive on mixed use, diversity and amenity. We need a zone which allows a genuine mix of land uses to co-locate. This is what the new Commercial 3 zone is intended to achieve.

Urban renewal in older industrial area.

Melbourne’s inner city industrial areas have long been viewed as having lost their relevance for economic activity because of the inexorable decline of manufacturing, and the relocation of industry to the outer suburbs where there are larger sites free from land-use conflicts, and with more efficient access to the national freight network.

This is a familiar story across capital cities pretty much all over the world. Inner city industrial areas have been the ‘low hanging fruit’ for urban renewal programs that provide housing close to transport and services.

Younghusband Woolstores, Kensington []

What this story does not account for is that many new types of businesses have colonised these places because they are affordable, close to similar businesses, skilled labour, cultural venues, and to a large urban market of consumers. Often these businesses are small manufacturers, creative industries and startup companies.

These are the very industries that are expected to bloom in the disrupted economy that lies ahead.

How and where we work is changing.

Seismic changes in our society and economy mean that old ideas about ‘living’, ‘working’ and ‘making’ no longer hold true.

In a knowledge based economy, much work is done outside the traditional models of the company, the employee and the office. Todays worker are much less tied to a single employer or workplace, and they increasingly work from home, shared work spaces, and even communal spaces like cafes and libraries.

Coworking spaces are a manifest response to these trends, and they have grown exponentially across the globe.

For many, the line between ‘home’, work’ and ‘leisure’ is blurred and both employees and companies alike are seeking maximum flexibility with how work gets done.

“Workers love to walk out the front door of the office and find themselves in an inspired environment … But, of course, not all office developments on the fringe were created equally, so if these elements are not occurring organically, commercial developers will need to make sure they are providing tenants with a full complement of bars, restaurants and lifestyle options that reflect the way people like to live and work. Workers may want to study a course after work or take a meditation class in their lunch break, and offices need to be in locations where this amenity is easily accessible.” - Pat Burke, Peregrene Projects[1]

Many new workspace models are now also emerging as a result of the changing expectation of the workforce, including lifestyle oriented workspaces, integrated living/working spaces, artisan manufacturing spaces and a variety of creative spaces and cultural venues.

All of these models are variants of a broader theme of mixed use and flexible buildings.

The Collective, London []

Even the scale and nature of manufacturing has begun to change. Today a single person can design, produce and sell goods from their home, using digital design, printing, fabrication, and online marketing and sales platforms.

So there are far fewer reason to separate where we live, work and play than there was in the past industrial eras.

From redundancy to opportunity.

Melbourne is truly fortunate to have significant tracts of industrial and commercial zoned located near transport infrastructure in our inner and middle suburbs. These areas typically comprise older style buildings that have for many years offered affordable accommodation for a wide range of commercial and cultural activities, ranging from small scale manufacturing activities through to low-rent office and production spaces.

Inner Melbourne's industrial and commercial zones

Far from being economically redundant, these areas are perfect locations for the establishment and growth of new enterprises. So they are a valuable economic resource for our city, complementing the role of the Central City and Activity Centres. We need to nurture economic growth within them.

These areas have good bones that can play an important role in the incubation of creative industries, small batch manufacturing and startup companies.

For these precincts to fully cater for the many contemporary and emerging types of work, they must offer a high quality urban environment with a mix of public spaces and activities – including places to eat and drink, child care, health and wellbeing facilities. They also need to offer affordable places to work, and in some cases the potential to include affordable housing options for those working in these precincts.

Our city needs precincts that can accommodate new models of mixed use development, and zoning tools that provides flexibility to facilitate diversity.

Commercial 3 – a zone for creative industries, small manufacturers and startups.

The new Commercial 3 zone is essentially a mixed use employment zone which is intended to facilitate the establishment and growth of creative industries, small manufacturers and startup businesses.

The zone prioritises particular uses that form part of the emerging economy (including new models of industrial, commercial/office and certain other employment-generating uses).

The nature of businesses operating within the emerging economy is much more diverse than in the past, encompassing various types of creative industries, small-scale manufacturers and technology oriented startup businesses. Some of these activities fall within the category of ‘office’ or ‘industry’ definition under our planning scheme, others do not and many sit across multiple land use definitions.

Mycelium Studio, Brunswick East []

For this reason, the Commercial 3 Zone provides for uses such as offices, arts and craft centres, education centres, home based business, certain types of industry, manufacturing sales, markets and research centres to operate without the need for planning permission.

The zone also allows for other uses (including accommodation, small-scale retailing, places of assembly, and warehouses) that have the potential to contribute to the amenity and economic vibrancy of the locality. Floor area thresholds have been applied to these uses to reflect their role as small-scale activities within a mixed use employment context. Examples include:

  • Cafés, restaurants or bars can be established in this zone without the need for a planning permit, so long as they are 150sqm or less in floor area – a planning permit is required for larger premises.

  • Activities like cabinetmaking, bakeries and smallgoods manufacturing can establish without the need for a planning permit, as can other industrial uses subject to satisfying certain buffer requirements.

  • A Place of Assembly can be established in this zone without the need for a planning permit, so long as it is 200sqm or less – a planning permit is required for larger premises.

  • A Shop of up to 200sqm and a warehouse of up to 500sqm can establish, subject to a planning permit being granted.

Planning permission can also be sought for dwellings and certain other types of residential buildings in the zone. The combined gross floor area of such uses must not exceed 35% of the combined gross floor area of all buildings on the lot.

It is possible for the Planning Authority this to vary this percentage up or down via a schedule to this zone.

However, the dwelling/residential building percentage can only be varied upwards to a maximum of 50%.

The intent of permitting these wider range of uses on a conditional basis is to complement economic activity and allow a genuine mix of uses to establish over time, but to also ensure that such uses do not end up displacing industrial, and commercial/office uses from such areas.

If Its isn’t broken, don’t try to fix it.

Melbourne’s enterprise areas are not homogeneous – the capacity for each location to support a diversity of workspace development models is influenced by its zoning and by local property market conditions (which are in turn linked to factors including location, accessibility, amenity, etc.).

Many of Melbourne’s existing industrial and commercial zones already accommodate many significant and important industries, a number of which depend upon separation from sensitive uses in order to continue their operations. In certain instances, the best outcome will be to retain these areas in their existing zone.

In other instances, it will be a judgement call as to whether the ‘reverse amenity’ decision guidelines contained within the Commercial 3 zone are adequate enough to ensure that existing economic activities are not displaced by new sensitive uses. This will be an important factor in deciding whether to apply the Commercial 3 zone to an area or not.

A number of Melbourne’s inner city enterprise areas such as Cremorne, Collingwood, Abbotsford and South Melbourne have the right location, accessibility, and amenity to support the creation of new office development and attract new business growth.

650 Church Street, Cremorne []

Cremorne (recently dubbed ‘Silicon Yarra’) is in a Commercial 2 zone and it has attracted unprecedented investment from medium and large technology companies over the past five years. Perhaps this is a precinct where no changes are needed to the current land zoning. However, there may be some activities that are missing from this area that could add to its vibrancy, and the Commercial 3 zone may well be a tool to help facilitate their realisation.

In other contexts, the best strategy for retaining or creating low cost workspace for creative industries might be to simply leave the land in an industrial zone.

Each location needs to be looked at from the wider perspective of its current and potential future role in the city economy. These are the sort of question that need careful consideration before deciding to amend the existing zonings of any given location.

Where to next ?

The task ahead is for local Councils to determine whether and where to apply the Commercial 3 to land within their municipality. This decision needs to be informed by an assessment of the ongoing suitability of established industrial and commercial areas for different types of employment purposes, and whether there are locations where the Commercial 3 zone might facilitate growth in creative industries, etc.

Determining whether or not to permit residential use as part of the land use mix in a Commercial 3 zone will be the most challenging part of the equation for Councils to address. It won’t be appropriate to allow housing in every Commercial 3 precinct, but equally, not every employment precincts need to be set aside for single-use purpos­es. Achieving a mix of uses is a large part of what drives the amenity and dynamics that make places attractive for business.

Residential use is only intended to be permitted where it can be demonstrated that it will complement the employment and economic development focus of the zone. A thorough analysis of the potential commercial and land use impact of residential use will need to inform the strategic justification for any future proposals.

Melbourne and Victoria need high quality mixed use employment precincts now more than ever. The Commercial 3 zone is an innovative new tool to provide flexibility for a wide range of small scale activities to co-locate with office and light industrial activities.

It is a much-needed and very welcome means of fostering and growing creative industry in this State.

Mark Woodland provided advice to the Victorian Government on emerging employment trends and the case for creating a new commercial zone to foster growth of creative industries and mixed use precincts. A copy of the report ‘Melbourne’s Enterprise Areas’ (Echelon, 2018) can be downloaded at


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